NAV on 2021/01/22
|NAV on 2021/01/21
|52 week high on 2020/12/31
|52 week low on 2020/03/24
|Total Expense Ratio on 2020/09/30
|Total Expense Ratio (performance fee) on 2020/09/30
STANLIB Collective Investments (RF) (Pty) Limited
South African--Multi Asset--Income
BEASSA All Bond 1 to 3 year split
Henk started his career in 1984 as a bursary student at the marketing division of Telkom, moving to the treasury division after one year. Henk became an economist at Senbank in 1986, before rejoining the treasury environment in 1989 at Senbank. Henk joined Liberty Asset Management in 1990 and assumed responsibility for STANLIB's cash and fixed-interest teams in 2000. Henk is regarded as one of the best fixed-interest managers in the country due to his consistent performance in respect of STANLIB's Bond and Income Funds.
Victor joined SCMB Treasury in 1996 as a trainee dealer in the foreign exchange markets and later moved to Nedcor Investment Bank as a capital markets dealer. In early 2001, he joined Libam's fixed interest team as a capital markets dealer and assistant to Henk Viljoen.
STANLIB Flexible Income Fund - Dec 19
The fund delivered good performance for the quarter, bringing the one-year return to 10.4%. We cut the fund’s property position to zero, as sector fundamentals continue to deteriorate. We decreased the allocation to inflation-linked bonds and increased allocations to nominal bonds, as inflation remained benign. The fund’s modified duration was increased from 1.6 years to 2.9 years to reflect our constructive nominal bonds views. The size of the fund was R2.5 billion at the end of the third quarter.
Ongoing global trade tensions continued to affect confidence negatively in Q3 2019, putting further strain on emerging market assets. The rand was on the back foot, losing about 6% against the dollar, while the 10-year benchmark government bond was almost 20 basis points weaker at the end of the quarter. The global backdrop still remains supportive for emerging market bonds due to an increasing number of negative-yielding bonds in developed markets and lower-trending inflation globally. The US Federal Reserve cut interest rates for the first time since the financial crisis, indicating that these are midcycle cuts to provide “insurance” against weaker growth rather than a longer-term policy change.
The Fed’s cuts have encouraged emerging market central banks, including the SARB, which are facing declining inflation and slowing growth, to follow suit. This provides further support for emerging market yields to perform well despite the volatility driven by the US/China trade war. SA’s headline inflation moderated to a low of 4% y/y in the quarter and is expected to average 4.2% for the year. The SA government issued a eurobond that was over-subscribed, raising $5 billion instead of the $4 billion that was planned initially. This will go a long way towards improving the government’s funding requirements ahead of the MTBPS late in October. There has been some compression in the yield curve as the government is not considering any more switch auctions for this calendar year, which eases pressure in the ultra-long end of the curve with issuances.
At a conference held in SA in September, Moody’s stated that SA’s fiscal deterioration over the past decade has been in line with the median Baa3 countries. This improves SA’s prospects of avoiding a downgrade, with the worst-case scenario being an outlook change from stable to negative. Moody’s sees the structure of SA’s debt as having lower refinancing risk than its peers. The South African CDS spread is trading wider than comparable peers that are already in junk territory, meaning that the markets have already priced in a downgrade to junk status. A reprieve by Moody’s would give SA an opportunity to produce a credible economic restructuring plan to deal with its persistent fiscal slippage and stimulate economic growth prospects. If there is no downgrade, this will be positive for the bond market.
With survey data in the US and eurozone continuing to indicate a slowdown in growth, coupled with dim growth prospects locally and inflation firmly inside the target range, local bonds are still expected to offer attractive returns given their compelling real yields in comparison to peers. The wider currency and credit risk premiums built into bond prices are expected to gradually unwind after the October MTBPS and Moody’s rating announcements. Globally, the ECB will resume its open-ended quantitative easing programme in the fourth quarter and the Fed is expected to continue cutting interest rates to manage the slowdown in the US economy. This leaves room for the SARB to cut rates in November.
The portfolio seeks to maximise overall return, in the form of both income and capital growth. It will be consistent with the investment of funds in a flexible mix of predominantly non-equity securities.
3.1 The STANLIB Flexible Income Fund shall be a portfolio predominantly investing in non-equity securities.
3.2 The investment objective of the STANLIB Flexible Income Fund is to provide an efficient investment medium whereby investors can participate in a portfolio that will seek to provide the maximum overall return, in the form of both income and capital growth, which will be consistent with the investment of funds in a flexible mix of predominantly non-equity securities. The portfolio will be managed in compliance with the Prudential Investment Guidelines that are applicable to retirement funds from time to time.
3.3 The STANLIB Flexible Income Fund will predominantly invest its assets in South African investment markets at all times and will be permitted to make investments in a flexible mix of non-equity securities, to the maximum permitted by the Act, and any other securities, which may be included in a portfolio in terms of the Act and relevant legislation, which are consistent with the portfolio's investment policy, and which will include but will not be limited to preference shares. The manager may from time to time invest in participatory interests or any other form of participation in portfolios of collective investment schemes or other similar collective investment schemes, that predominantly invest in non-equity securities, as the Act may allow from time to time. Where the aforementioned schemes are operated in territories other than South Africa, participatory interests or any other form of participation in portfolios of these schemes will be included in the portfolio only where the regulatory environment is to the satisfaction of the manager and the trustee and of sufficient standard to provide investor protection at least equal to that in South Africa.
3.4 Nothing contained in this supplemental deed shall preclude the manager from varying the ratios of securities and non-equity securities, to best position the portfolio to achieve its objective in a changing economic environment or market conditions or to meet the requirements, if applicable, of any exchange recognised in terms of the Act and from retaining cash or placing cash on deposit in terms of the deed and any supplemental deeds thereto.
3.5 The STANLIB Flexible Income Fund may from time to time invest in financial instruments, in accordance with the provisions of the Act, in order to achieve the portfolio's investment objective.
3.6 The STANLIB Flexible Income Fund will further be permitted to invest its assets in foreign investment markets, within the implied limitations of the portfolio's industry association portfolio classification, in a flexible mix of non-equity securities, to the maximum permitted by the Act, and any other securities which are consistent with the portfolio's investment policy, which will include but will not be limited to preference shares, and which may be included in a portfolio in terms of the Act and relevant legislation.
3.7 For the purpose of this portfolio, the manager shall reserve the right to close the portfolio to new investors on a date determined by the manager. This will be done in order to be able to manage the portfolio in accordance with its mandate. The manager may, once a portfolio has been closed, open that portfolio again to new investors on a date determined by the manager.
3.8 The trustee shall ensure that the investment policy set out in this supplemental deed is carried out.